In the dynamic landscape of the UK rental sector, the changes regarding the proposed Section 21 Abolition may be about to take a turn. iHowz, our Landlord’s Association, has been collaborating closely for some time with Conservative members from both Houses of Parliament. iHowz will suggest an innovative alternative to the current propositions to abolish Section 21, as outlined in the Government’s Renters Reform Bill, (RRB) 2022-2023.
Following the Chancellor’s Autumn Statement, the parliamentary meeting will take place on 22 November 2023 at 15:45. IHowz and Conservative MPs will unite to present their unique stance and alternative proposals for the planned abolition of Section 21. Leading Counsel, Andrew Butler KC, will chair the parliamentary briefing in the Churchill Room at the House of Commons. Find out more about the meeting and Tanfield property and real estate barristers here.
Initially, Craig Mackinlay, Conservative MP for South Thanet, agreed to sponsor the event. Unfortunately, due to unforeseen health issues, he is unable to proceed. We extend our gratitude to him and our best wishes for his recovery. Stepping in, Sir Christopher Chope MP has graciously agreed to take over the sponsorship for the event.
Get the Inside Scoop: What You’ll Discover in this Article
Stay with us as we take a deep dive into the complex and often controversial issues surrounding the proposed abolition of Section 21 (also known as ‘no fault evictions’). In this post, we will examine:-
- Examples of Media and Advocacy Outcry Against Section 21’s Impact on Homelessness and Tenant Injustice
- Summary of the Main Arguments for a Section 21 Abolition
- Landlords will be less likely to rent to Socially Disadvantaged Groups creating an ‘Underclass of Tenants’
- Debunking the ‘Overuse of Section 21’ by Landlords Claim
- Why do Landlords More Frequently Use a Section 21 Notice rather than a Section 8?
- Challenges Faced by Tenants Evicted under Section 8: Stigma, Support Gaps, and Heightened Homelessness Risk
- Potential Mass Exodus of Private Landlords: Heightening Pressure on an Already Overstretched Social Housing Sector
- Humanising Housing Solutions – A Compassionate Approach to Section 21 Amendments
- Revamping Section 8: A Call for Practical Reforms by iHowz
- Unlocking Change: Explore Our Campaign’s Vision Through Our Recent Summary and Detailed Letters to MPs
Understanding the Section 21 Notice
In England and Wales, a section 21 notice, (also referred to as a section 21 notice of possession or a section 21 eviction), is a formal notice outlined in the Housing Act 1988 under section 21. This notice allows a landlord to initiate the process of taking possession of a property leased under an Assured Shorthold Tenancy (AST) without providing a specific reason for the decision. It’s important to note that the expiration of a section 21 notice does not automatically terminate the tenancy. Rather, the landlord must obtain a court order for possession and then enforce it through a County Court bailiff or High Court enforcement officer.
The Impact of Assured Shorthold Tenancy (AST) on Landlords and the Private Rented Sector Growth
The introduction of the Assured Shorthold Tenancy (AST), under the late Baroness Thatcher, provided landlords with the Section 21 Notice, a secure means of repossessing their property after six months. This development significantly reduced the uncertainties associated with being a landlord, fostering a favourable environment for the expansion of the buy-to-let market.
Consequently, this shift laid the groundwork for the remarkable growth of Britain’s Private Rented Sector. The 2021-22 English Housing Survey estimates there are 4.6 million households in the English Private Rented Sector, which at 19%, is almost one-fifth of all households in England.
The influence of the Assured Shorthold Tenancy (AST) is noteworthy, particularly considering that many attribute the landlords’ capacity to reclaim their properties as the pivotal factor fostering increased investment in the private rental sector.
The Turning Tide Against Section 21 (2019 – 2022)
Since its inception, the landscape surrounding Section 21 eviction notices has evolved with the introduction of various legislative measures, notably beginning with the Retaliatory Eviction and Deregulation Act in 2015. This pivotal legislation marked the initial curtailment of Section 21’s application, restricting its use in cases where landlords failed to provide a valid gas safety certificate or address outstanding property repairs.
Subsequent amendments have expanded these limitations to encompass a broader spectrum of circumstances. The scope now includes situations involving unlicensed Houses in Multiple Occupation (HMOs), improper protection of deposits, and more.
The tide began to truly turn when the Conservative Party, in their 2019 manifesto, pledged a ‘better deal for renters.’ This ‘better deal’ included the abolition of the ‘no-fault’ or Section 21 eviction. In her 2019 Christmas address to the Nation, the Queen mentions a future Renters Reform Bill. However, this bill was not introduced during the 2019-21 parliamentary session. Two years later, in her 2021 Queen’s speech, her late Majesty stated,
My Government will help more people to own their own home whilst enhancing the rights of those who rent.
The long-anticipated ‘Levelling Up White Paper’, announced by the Government on February 2, 2022, also revealed plans to abolish the Section 21 ‘no fault’ eviction Notice. This move aims to end ‘unjust’ evictions by landlords
In June of 2022, the government published another White Paper ‘A fairer private rented sector’. The policy paper states the intention to reform the Private Rented Sector (PRS) and ‘level up’ housing quality in the UK. Point 3 of the 12-point plan states,
We will deliver our manifesto commitment to abolish Section 21 ‘no fault’ evictions and deliver a simpler, more secure tenancy structure. A tenancy will only end if the tenant ends it or if the landlord has a valid ground for possession, empowering tenants to challenge poor practice and reducing costs associated with unexpected moves.
Section 21 Abolition to be delayed
The Commons Housing Select Committee reported concerns to the Government regarding various aspects of the Renters Reform Bill. On 20 October 2023, the Government released a full response to the committee. The report specifies that the abolition of section 21 hinges on fortified possession grounds and a streamlined court process.
As part of these proposed changes, the Government aims to:-
- Simplify the court process for landlords by introducing digital enhancements
- Prioritise specific cases, particularly those related to antisocial behaviour
- Enhance bailiff recruitment and streamline administrative tasks to expedite possession enforcement
- Offer early legal advice and improved guidance for tenants, aiding them in finding suitable housing solutions
On 23 October 2023, the second reading of the RRB took centre stage, featuring a compelling promise from Michael Gove. He pledged to postpone the implementation of the removal of Section 21 until comprehensive court reforms are finalized. However, the intriguing part is the lack of clarity on what exactly these reforms entail, leaving us waiting in anticipation for the details of this crucial development We expect the Renters Reform Bill to receive Royal Assent in 2024. It will be enacted for new tenancies after 6 months and for existing tenancies after 18 months. The initial plan aimed to abolish Section 21 at the same 18-month mark. However, its implementation has been postponed until, possibly, as late as 2026. This delay is due to the government’s prioritisation of court reform progress.
These persistent delays highlight the critical importance of the upcoming parliamentary briefing for iHowz. The delays create a window of opportunity and emphasize the pressing need for attention and action.
The Growing Call to Abolish Section 21 and the Reasons Why
The claims from major UK housing charities, such as Centrepoint, Shelter, and Generation Rent, are compelling. They assert that the Section 21 Notice is the primary driver of homelessness across all age groups. This narrative has gained traction within these influential organizations. Additionally, the mainstream media has extensively covered the issue. It often portrays landlords’ rights to issue a Section 21 Notice in a negative light.
Examples of Media and Advocacy Outcry Against Section 21’s Impact on Homelessness and Tenant Injustice
Summary: Government data reveals a pressing need for private renting reform as Section 21 no-fault evictions spike by 50%, impacting 24,060 households in 2022. Homelessness rises by 6% to affect 290,330 households. The awaited Renters’ Reform Bill aims to eliminate Section 21 evictions. Consequently, Shelter urges swift, robust action from the government to protect renters and close potential loopholes.
Summary: Shelter sheds light on the unjust application of Section 21 Notices through three compelling case studies. The first underscores the unsettling uncertainty faced by renters about their future. In the second case, a financially struggling tenant requesting a rent reduction is met with a Section 21 notice. The third case vividly illustrates a retaliatory Section 21 eviction, triggered when a tenant insisted on necessary repairs. Shelter argues that these real-life scenarios emphasize the need for reforms to protect tenants from unfair and detrimental evictions.
BBC: ‘No-fault eviction threat up 76% for renters’ (24 Nov 2022)
BBC ”I couldn’t sleep, eat or function after eviction stress‘ (07 Aug 2023)
Summary of the Main Arguments for a Section 21 Abolition
- S21 increases homelessness across all age sectors in the PRS
- Rogue landlords may issue a retaliatory S21 in response to requests for repairs or rent reductions
- Overuse of S21: Landlords issue a S21 for no reason whatsoever
- Inadequate Tenant Security: Concerns of Unstable Tenure and the unsettling reality of a two-month eviction notice, regardless of residency duration
Shelter and other tenant advocacy groups passionately advocate for increased tenant security, urging a legal transformation to eliminate Section 21 and provide a minimum 3-year tenancy. Shelter, for example, envisions a rental landscape where tenants enjoy enhanced stability and long-term housing security. The chief executive, Polly Neale, of Shelter, states,
For too long struggling private tenants have been trapped in an insecure and unstable private rented sector with the constant worry of being one no-fault eviction notice away from homelessness.
iHowz and Other Industry Experts Argue that Losing Section 21 will INCREASE homelessness
iHowz, along with other leading industry experts, including the NRLA (National Residential Landlords Association) argue that losing the S21 will, unintentionally, have the opposite effect and lead to an increase in homelessness. Let’s take a look at some of the reasons why.
Landlords will be less likely to rent to Socially Disadvantaged Groups creating an ‘Underclass of Tenants’
In the past, some landlords offered housing to less preferable tenants, relying on Section 21 as a safeguard against non-compliance, especially in cases of Anti-Social Behaviour (ASB). However, many landlords now express reservations. They worry about continuing to house socially disadvantaged individuals due to the potential removal of this protective measure. Below are three case studies from private landlords in our association that illustrate this point:-
Case Study 1: Landlord MS has traditionally designated around 10% of their housing stock for socially disadvantaged individuals, especially those encountering difficulties in securing references or guarantors. Throughout 60 years in the industry, they have refrained from issuing any Section 21 notices. However, with the prospective elimination of the Section 21 provision, they intend to issue 12 notices and adjust their rental policy to reject applicants unable to furnish references or a guarantor.
Case Study 2: Landlord HR was in discussions with the court system to provide housing for ex-offenders. Regrettably, those discussions are currently on hold.
Case Study 3: Landlords SS runs a large House in Multiple Occupation (HMO) designed for individuals who face barriers to entering the property market, be it through renting or buying. Regrettably, they must now cease this service, thereby eliminating a crucial first step on the housing ladder.
As landlords navigate an evolving rental landscape, they will become increasingly cautious in their tenant selection process. This caution translates into a growing reliance on flawless references and/or guarantors from prospective tenants. Regrettably, this heightened scrutiny will mean that individuals who are unable to meet these stringent criteria may find themselves without viable housing options
Neil Cobbold, managing director of Payprop, UK recently stated that,
Landlords need confidence that they can continue to invest in the sector and regain possession of their properties efficiently through the courts if needed
Debunking the ‘Overuse of Section 21’ by Landlords Claim
Contrary to some assertions, it is not a sound financial move for landlords to evict tenants without good cause. Yes, we concede that, as in any other industry, there may be the odd ‘rogue landlord’. However, due to the colossal amount of already-existing legislation around the PRS, these are few and far between. Without a doubt, there have been cases whereby an unscrupulous landlord has served a Section 21 because the tenant is insistent on essential repairs. However, we believe most landlords are decent, law-abiding businessmen.
Indeed, The Leaders Romans Group (LRG), a leading property services group in the UK, conducted research demonstrating that Section 21 is seldom overused and, even more rarely, misused.
The three primary reasons for landlords to end a tenancy include:-
- Tenant involvement in Anti-Social Behaviour (ASB).
- Rent arrears
- Sale of the property or the need for the landlord/family member to move in.
Yet, should Section 21 be eliminated, all evictions would be conducted under Section 8 of the Housing Act 1988. This necessitates landlords to substantiate a valid ground for eviction. These valid grounds include rent arrears, antisocial behaviour, and the intent to sell or occupy the property. Thus, abolishing Section 21 is unlikely, in real terms, to reduce tenant evictions because the underlying reasons for doing so are the same.
Why do Landlords More Frequently Use a Section 21 Notice rather than a Section 8?
The primary motivations that landlords tend to opt for a Section 21 eviction over a Section 8 currently include:
- The landlord does not need to attend court (if the eviction is not contested by the tenant)
- Section 8 proves ineffective for cases related to Anti-Social Behaviour (ASB), given the challenges in meeting the burden of proof.
- Section 8 is inefficient when the landlord intends to sell or move into the property (although proposed amendments are under consideration).
Challenges Faced by Tenants Evicted under Section 8: Stigma, Council Support Gaps, and Heightened Homelessness Risk
Under the Homelessness Reduction Act 2017, councils are presently obligated to provide re-housing assistance to individuals evicted under Section 21. However, the same duty of care does not extend to those evicted under Section 8, creating a disparity in support measures.
Proposed changes indicate that all evictions would fall under Section 8. If landlords have to use Section 8 for rent arrears, it could lead to tenants receiving a County Court Judgement (CCJ). This is in contrast to evictions under Section 21, where no CCJ is issued.
According to Neil Cobbold, more than four-fifths of landlords (84%) are unwilling to lease to tenants with a history of rent arrears, as revealed by the 2021 English Private Landlord survey. Cobbold highlights data from the Department for Levelling Up, Housing, and Communities, indicating that over 24,200 households served a valid Section 21 notice were eligible for council assistance in 2022/23. Under the RRB this would leave at least 24,000 households potentially without council support and facing bleak prospects for finding accommodation in the Private Rented Sector (PRS).
Potential Mass Exodus of Private Landlords: Heightening Pressure on an Already Overstretched Social Housing Sector
The PRS currently plays a pivotal role in reducing the stress on the Social Housing Sector. The existing shortage of social homes in England is woefully inadequate to meet the surging demand. According to the Local Government Association (LGA), over 1.2 million households are currently on waiting lists for social housing. Furthermore, close to 100,000 households, find themselves relegated to temporary accommodation. The strain on councils is evident and a reduction in housing in the PRS will only compound the problem.
Against this backdrop, the social housing sector is under immense stress, grappling with a diminishing inventory. The increasingly unaffordable private rental sector further compounds the challenge; creating a perfect storm propelling homelessness and social disadvantage. A survey conducted by Mortgages for Business reveals that one-third of landlords express concerns about the potential abolition of Section 21. Coupled with the escalating bureaucracy within the Private Rented Sector (PRS), the removal of Section 21 could serve as a significant driving force behind the increasing trend of property owners exiting the PRS.
However, on the opposing side of the debate, Gideon Salutin, a researcher at the Social Market Foundation, contends that there is no substantiated evidence of a landlord exodus in countries that have implemented bans on no-fault evictions. Indeed, the idea that there will be a ‘landlord exodus’ should Section 21 be scrapped, is controversial. Only time will tell…
The iHowz Campaign: Advocating for Amendments Instead of Complete Section 21 Abolition
The primary bone of contention for those in favour of abolishing Section 21 lies in the abrupt two-month notice period, irrespective of a tenant’s duration in the property. The potential fallout of such sudden evictions, especially for vulnerable tenants, raises compelling concerns.
While acknowledging these apprehensions, iHowz advocates for a nuanced approach. We propose a more balanced strategy to enhance tenant protection without destabilizing the private rental sector. Our recommendation involves a thoughtful adjustment to the Section 21 process—a dynamic sliding scale of notice, complemented by a recompense scheme.
This innovative solution aims to preserve the essence of Section 21 while injecting flexibility into the eviction process. By tailoring the notice period to reflect the length of a tenant’s stay, we strike a fair compromise between landlord interests and the vital need for tenant stability. Additionally, the proposed recompense scheme serves as a safety net, mitigating the potential adverse effects on tenants facing abrupt displacement.
|Duration of Tenancy||Minimum Notice Period||Recompense|
|1 Year Tenure||2 months||Last 2 months rent free|
|2 Years Tenure||3 months||Last 2 months rent free|
|3 Years Tenure||4 months||Last 2 months rent free|
|4 Years Tenure||5 months||Last 2 months rent free|
|5+ Years Tenure||6 months||Last 2 months rent free|
Humanising Housing Solutions – A Compassionate Approach to Section 21 Amendments
Our proposed amendment to Section 21 brings practicality to the eviction process. The notice period will now align with the duration of a tenancy, ensuring a fair and tailored approach. For tenants residing in a property for a year or more, the last two months will be rent-free. This provides the necessary time to plan, secure a new property, and cover moving expenses.
So, let’s take a look at a fictional case scenario to illustrate. Tenant X and their family, having been tenants of their landlord for four years, now find themselves in a challenging situation. With the landlords undergoing a recent separation, they’ve opted to sell the property to address the financial aspects of their divorce settlement. The proposed modifications serve as a protective measure against undesirable landlord practices.
In line with the iHowz initiative to amend areas of Section 21, rather than eliminate it, Tenant X and their family stand to gain from a more empathetic approach, which includes a 5-month notice period and the last two months rent-free. This prolonged timeframe serves as a crucial support system for Tenant X, granting them the necessary duration to secure alternative accommodation. Additionally, it offers practical assistance by alleviating financial strain, covering moving expenses, and helping with the new deposit. This example emphasizes the positive impact of legislative changes. iHowz’s proposed amendments to Section 21 aim to benefit tenants, making the process fairer for those facing adversity.
Revamping Section 8: A Call for Practical Reforms by iHowz
At iHowz, we’re advocating for a Section 8 overhaul to align it with modern-day needs. Specifically, we believe it’s time for a reevaluation, particularly in cases involving the sale of the property or a family member requiring occupancy.
Here’s the scoop on our suggested changes:
Sale of Property or Family Member Moving In:
We’re pushing for a Section 8 that caters to the realities of property sales and family dynamics. Let’s make it fit-for-purpose and ensure a smoother transition for landlords and tenants alike.
Streamlining Rent Arrears Cases:
In uncontested rent arrears exceeding two months (or 8 weeks), we propose a streamlined process. There is no need for court attendance; possession should be automatically granted through the court system, similar to the current Section 21. This not only expedites proceedings but also frees up court resources for other cases. Of course, tenants retain the right to appeal.
While the Deregulation Act proposed an abandonment process, it hasn’t been enacted. We’re reigniting the conversation on this front, emphasizing the need for a clear and effective procedure when a property is abandoned.
Unlocking Change: Explore Our Campaign’s Vision Through Our Recent Summary and Detailed Letters to MPs
To delve deeper into our campaign and grasp the intricacies of our proposals, we invite you to explore two essential documents:
Summary Letter to MPs:
A concise overview of our campaign objectives and key recommendations sent directly to Members of Parliament. It encapsulates the essence of our advocacy, providing a quick snapshot of the changes we propose.
Detailed Letter for the Parliamentary Briefing:
To support our parliamentary briefing, we produced an in-depth letter that delves into the nuances of our proposals. This document offers a comprehensive understanding of the rationale behind our suggested reforms, ensuring you are well informed about the intricacies of our campaign.
Your engagement and support are crucial in championing these reforms. We encourage you to peruse these documents to become an active participant in our mission for a fairer and more balanced rental system.
Embrace Change, Take Action: Your Voice Matters!
In this quest for a fairer, more balanced rental system, your involvement is key. If the potential consequences of losing Section 21 resonate with you, we urge you to make your concerns known. Writing to your MP, both at your residence and property locations, is a powerful way to ensure your voice is heard.
Find your MP here, and express your concerns in your own words – your unique perspective matters. It only takes a few letters to capture an MP’s attention, and a collective effort of MPs lobbying ministers can make a significant impact.
At iHowz, we believe in the strength of community engagement. Formed nearly fifty years ago, we have consistently worked with successive governments, providing insights on matters crucial to the Private Rental Sector (PRS). If you share our commitment to shaping a better rental future, explore the benefits of becoming a member of iHowz here.
Your participation is not just a call to action; it’s an investment in a rental landscape that values both landlords and tenants. Together, let’s make a lasting impact on the future of the private rental sector. Visit iHowz to become a part of this transformative journey.